Up in smoke: States criticized for use of tobacco settlement funds
Up in smoke: States criticized for use of tobacco settlement funds
According to a coalition of health groups, most states are failing to keep their promise to use a significant portion of their tobacco settlement funds to support tobacco prevention programs.
"Even the meager amounts allocated for prevention are at risk as state legislatures convene to address budget shortfalls," states the report Show Us the Money: An Update on the States’ Allocation of the Tobacco Settlement Dollars, released by the Campaign for Tobacco-Free Kids in Washington, DC; the American Heart Association in Dallas; the American Cancer Society in Atlanta; and the American Lung Association in New York City.
The groups claim that only five states — Arizona, Maine, Massachusetts, Minnesota, and Mississippi — are funding tobacco prevention programs at the minimum level recommended by the Centers for Disease Control and Prevention (CDC) in Atlanta. And only 19 states have committed to at least 50% of the CDC’s minimum funding level.
The National Council of State Legislatures (NCSL) in Washington, DC, counters that the settlement did not specify that prevention programs must be funded, and says states are meeting the terms of the settlement through their spending decisions.
"The majority of the states," the report says, "are funding tobacco prevention at less than half the CDC minimum. Indeed, some states have moved backward and reduced tobacco prevention funding over the past year. As they face budget shortfalls, some states are using settlement funds, including funds previously committed to tobacco prevention, to balance their budgets.
"These are penny-wise, pound-foolish decisions that ignore the conclusive evidence that tobacco prevention programs not only reduce smoking and save lives, but also save far more money than they cost by reducing smoking-caused health care expenditures. Even in these difficult budget times, tobacco prevention is one of the smartest and most fiscally responsible investments that governors and state legislators across the country can make."
In November 1998, 46 states and the tobacco industry settled the states’ Medicaid lawsuits for recovery of their tobacco-related health costs. The industry agreed to pay the states some $206 billion over the next 25 years. Four states (Mississippi, Texas, Florida, and Minnesota) settled their lawsuits separately for a total of $40 billion over 25 years. The industry also is going to pay an additional $5 billion to 14 states to compensate them for potential harm to their tobacco-producing communities.
The health organizations say the two most egregious examples of states backing away from their commitments are Florida and Tennessee. Last December, they say, the Florida legislature and Gov. Jeb Bush cut funding for the state’s program by $7.5 million, 20% of its $37.3 million budget, which already had been cut from $70 million in the program’s first year. And the Tennessee legislature rejected the governor’s objections and voted to use all the state’s settlement money received to date to balance the budget for one year.
Florida was hurt by a slump in travel following the Sept. 11 terrorist attacks, and in Tennessee, efforts to increase taxes to balance the budget were blocked by protesters who broke windows at the governor’s office in July.
"It is not enough to claim, as some do, that more of the money in many states is being spent on other health’ programs," the report asserts. "These cases were brought to reduce the death toll from tobacco. There is no single public health action that will save more lives than a dramatic reduction in the number of people who die from tobacco use. By investing in tobacco prevention now, states will save money in the long term and see their health care costs decline along with tobacco consumption."
The states respond
The health organizations say state failure to fund tobacco prevention is even more upsetting in light of "conclusive evidence" that comprehensive state programs work. They say that reports from the Institute of Medicine and the Office of the Surgeon General "concluded that we know how to reduce tobacco use and the harm it causes. The [Office of the] Surgeon General found that the U.S. could make unprecedented progress and reduce tobacco use by 50% in one decade through the implementation of currently used comprehensive prevention and cessation programs nationwide."
Compounding the problem, the organizations say, is the fact that "while states are breaking their promise to protect kids from tobacco, tobacco company promotional expenditures that affect children actually increased after the settlement. Despite promising as part of the settlement to stop targeting kids, the tobacco companies spent more than ever before in 1999, the first year after the settlement, to market their products. Much of the increase was in ways effective at reaching kids, such as advertising in youth-oriented magazines and convenience stores frequented by youth."
Responding to the critical report, the NCSL issued a statement that, "States have spent an historic $1 billion over the past two years on tobacco prevention programs and more than $8 billion on health care services because of the historic tobacco settlement agreement. State legislatures are meeting the requirements of the . . . agreement and are taking into account public sentiment while making decisions on how to spend those funds."
William Pound, NCSL executive director says that, "Contrary to the statements made by the special interest groups, no promises are being broken. State legislatures are responding to the needs of their citizens." The agreement reached between the tobacco companies and the states’ attorneys general did not specify how states were to spend the funds, Mr. Pound says.
State budgeting processes allow for public input, and legislatures have to make decisions on spending for education, health care, transportation, human services, economic development, and a wide variety of other important services that citizens demand, he adds.
"The basis for the lawsuits against tobacco companies was initiated because of the high health care costs states had to absorb for tobacco-related illness," said Lee Dixon, NCSL Health Policy Tracking Service director, in a statement. "Since then, states have made spending decisions based on the needs of their citizens, including increased funding of successful tobacco prevention programs initiated long before the tobacco settlement agreement was completed."
Ms. Dixon says legislatures are sensitive to the concerns of the supporters of tobacco prevention programs, noting that an NCSL survey found that 40 states had enacted legislation that allocates settlement funds to tobacco-use prevention, smoking cessation, and community- and school-based tobacco education programs.
But the health groups are not convinced. "Tobacco prevention programs are a vaccine that can protect our kids from tobacco addiction, disease, and death," says John Seffrin, CEO of the American Cancer Society. "Now that this vaccine has been proven to work, we have an obligation to provide it every year to every child in every state."
[Contact the National Center for Tobacco-Free Kids at (202) 296-5469 and Lee Dixon at the National Council of State Legislatures at (202) 624-3570.]
Status of State Decisions on Spending Tobacco Settlement Money
States that have funded tobacco prevention programs at a level that meets the CDC’s minimum recommendation (5):
- Arizona2
- Maine
- Mississippi
- Massachusetts1
- Minnesota
States that have committed substantial funding for tobacco prevention programs (14):
- California1
- Nebraska
- Colorado
- New Jersey
- Delaware
- Oregon1
- Illinois
- Pennsylvania
- Indiana
- Vermont
- Maryland
- Washington
- Arkansas
- Missouri
States that have committed modest funding for tobacco prevention programs (16):
- Georgia
- Rhode Island
- Hawaii
- South Dakota
- Iowa
- Utah
- Nevada
- Virginia
- New Mexico
- West Virginia
- New York
- Wisconsin
- Alaska
- North Dakota
- Florida
- Ohio
States that have committed minimal funding for tobacco prevention programs (12):
- Idaho
- Oklahoma
- Kansas
- South Carolina
- Kentucky
- Texas
- Louisiana
- Wyoming
- Alabama
- Montana
- Connecticut
- New Hampshire
States that have committed none of their tobacco settlement money for tobacco prevention programs (3 and DC)
- District of Columbia
- North Carolina3
- Michigan
- Tennessee
- California, Massachusetts, and Oregon have used funds from their tobacco settlement payments to supplement existing tobacco prevention programs.
- Arizona has a comprehensive tobacco prevention program currently funded solely from state tobacco excise taxes.
- North Carolina has set aside $5 million annually for health purposes, which could be allocated for tobacco prevention in early 2002.
Source: National Center for Tobacco-Free Kids, Washington, DC.
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